ACA adding billions to health care bureaucratic waste: study

June 4, 2015

FOR IMMEDIATE RELEASE
May 27, 2015
Contact:  Mark Almberg, PNHP communications director, mark@pnhp.org
ACA adding billions to health care bureaucratic waste: study
Initial $6 billion in start-up costs of exchanges pale beside $273.6 billion in extra insurance overhead from 2014 through 2022, researchers say The Affordable Care Act will add more than a quarter of a trillion dollars to the already very high administrative costs of U.S. health care through 2022, according to a study published Wednesday at the Health Affairs Blog.
Drawing on the “National Health Expenditure Projections for 2012-2022,” released in July 2014 by the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS), the authors – Drs. David U. Himmelstein and Steffie Woolhandler – calculated yearly estimates for private insurance overhead and government program administration costs both with, and without, the effects of the ACA.
Using estimates from the Congressional Budget Office, they also calculated the ACA’s coverage and cost.
“Between 2014 and 2022, the ACA will add $273.6 billion in new administrative costs over and above what would have been expected had the law not been enacted,” said Himmelstein. “That’s equivalent to $1,375 per newly insured person per year, or 22.5 percent of total federal expenditures for the program.”
Himmelstein and Woolhandler write: “Nearly two-thirds of this new overhead – $172.2 billion – will go for increased private insurers’ administrative costs and profits,” while the rest of the added overhead “is attributable to expanded government programs, i.e. Medicaid. But even the added dollars to administer Medicaid will flow mostly to private Medicaid HMOs, which will account for 59 percent of total Medicaid administrative costs in 2022.”
They observe that while insuring 25 million additional Americans, as the CBO projects the ACA will do, “is surely worthwhile,” the administrative costs of doing so “seem awfully steep, particularly when much cheaper alternatives are available.”
By way of alternatives, they point to traditional Medicare, which runs for about 2 percent overhead. Were the 22.5 percent overhead figure associated with the ACA to drop to traditional Medicare’s level, the U.S. would save $249.3 billion by 2022, they say.
The overhead rates of universal, single-payer systems such as Taiwan’s or Canada’s are even lower, closer to 1 percent, they write, adding that if the U.S. were to adopt a single-payer system, the savings on bureaucracy and paperwork would amount to about $375 billion annually, enough to provide high-quality, first-dollar coverage to all Americans.
“In health care, public insurance gives much more bang for each buck,” they write.
Himmelstein and Woolhandler are professors at the City University of New York School of Public Health at Hunter College and lecturers in medicine at Harvard Medical School. Their long-term research interests include the administrative costs of U.S. health care. They co-founded Physicians for a National Health Program.
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“The Post-Launch Problem: The Affordable Care Act’s Persistently High Administrative Costs,” by David U. Himmelstein, M.D., and Steffie Woolhandler, M.D., M.P.H. Health Affairs Blog, May 27, 2015.
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Physicians for a National Health Program (www.pnhp.org) is a nonprofit research and education organization of more than 19,000 doctors who support single-payer national health insurance. PNHP had no role in funding or otherwise supporting the study described above.

 

 

 

New York’s State Assembly just passed a single-payer bill

June 3, 2015

 

http://www.dailykos.com/story/2015/05/27/1388348/-New-York-s-State-Assembly-just-passed-a-single-payer-bill#

WED MAY 27, 2015 AT 04:38 PM PDT

by james321Follow

Some outstanding news from Albany.
Health Committee Chair Richard Gottfried who has regularly introduced a Medicare-for-all single-payer bill since 1992 has reason to smile today. The Albany Times Union has the breaking details.

The state Assembly approved on Wednesday evening a bill that would create a single-payer health system in New York.The bill passed 89-47.

As my colleague Claire Hughes reported this morning, the vote is the first to occur on the proposal, which Health Committee Chair Richard Gottfried has introduced annually for years, since 1992.

“New Yorkers deserve better,” Gottfried said in a statement. “We should be able to go to the doctor when we need to, without worrying whether we can afford it. We should choose our doctors and hospitals without worrying about network restrictions. We deserve health coverage for all of us, paid for based on our ability to pay, not what the market will bear. I’m proud the Assembly has passed the New York Health Act, and I look forward to working with a great community of advocates including medical professionals, medical students, organized labor, and Senate sponsor Bill Perkins, to enact it into law.”

There’s a lot to celebrate here. Many single-payer advocates were dispirited following the death of Vermont’s much-anticipated single-payer plan. So, seeing this kind of progress in another state is a big deal. And seeing this kind of progress in a big state is an even bigger deal.Why? Well, health insurers today don’t do much insuring of health risk, but they do a lot of administrating of employer health benefits. A small state like Vermont wouldn’t have taken a big chunk of, say, Aetna’s business away from them. However, a large state like New York “going single-payer” would put a massive dent in not only the marginally-profitable individual insurance business (i.e. Affordable Care Act plans and those purchased outside the state exchange), but also in the extremely lucrative — and highly-profitable — business of administering benefits for medium- and large-sized businesses that self-insure (i.e. they pay the medical bills, but outsource claims administration to Aetna or Cigna or Anthem) and that, were a state-plan passed into law, might be very keen to let their employees trade Aetna for the single-payer plan. If a few large states in America were to cut out the parasitical middle-men that are private insurers, it would be tough for them to sustain their business model in Mississippi and Wyoming — in other words, they might take their ball and go home.

Look at how the health insurance lobby responded to the threat of this bill. (Note their laughable attempt to claim they engage in the work of “providing care.”)

The Health Plan Association, which represents insurance companies, has opposed it; its CEO, Paul Macielak, said at an Assembly hearing in January that the act would dissolve the current private health care industry, which has a proven record for providing care.

But, wait a second, don’t get too excited, folks. The sad news is that the “New York Health Act” is unlikely to pass New York’s GOP-dominated Senate. Or, even if it did, could you imagine “Democrat” Andrew Cuomo signing it into law? (Health care policy wonks may remember that super-progressive Connecticut Governor Dannel Malloy killed his state’s public option — SustiNet — following nasty threats from Aetna CEO Mark Bertolini.)Nevertheless, the fact that this single-payer bill got as far as it did is strong testimony to the evolving health care policy landscape in the United States. Progressive leaders know that the Affordable Care Act is a highly-problematic health care “starter home” and we must continue pushing for true universal health care.

The success of this single-payer bill is also a reminder that Democratic Presidential Candidate Bernie Sanders’ pledge to implement a Medicare-for-all single-payer system is hardly a radical proposition. Indeed, it is a very serious one worthy of our attention, as this exciting news from New York’s State Assembly so clearly demonstrates.

 

ORIGINALLY POSTED TO JAMES321 ON WED MAY 27, 2015 AT 04:38 PM PDT.

ALSO REPUBLISHED BY GOOD NEWS AND SINGLE PAYER CALIFORNIA.

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Adios, Private Insurers? Assembly Votes for Single Payer

June 3, 2015

WNYC News  

http://www.wnyc.org/story/adios-private-insurers-assembly-votes-single-payer/

Wednesday, May 27, 2015

By Fred Mogul : Reporter, WNYC News

Assemblyman Dick Gottfried, from Manhattan’s Upper West Side, has been pushing for single-payer healthcare for decades. (Azi Paybarah / wnyc)

The New York Assembly wants to cut out the middle man.

A bill that passed 89-47 would essentially eliminate insurance companies and cover all New Yorkers’ healthcare needs through a so-called single payer system.

An identical bill hasn’t advanced in the state Senate, so the measure is not likely become law any time soon.

Doctors and hospitals wouldn’t have to take the new coverage. But under the proposed law, they couldn’t take private insurance, either — so it would be cash or nothing.

With no patient premiums, deductibles or co-payments for hospital and doctor visits, testing, drugs or other care, New York Health would pay providers through collectively negotiated rates.

The New York Health Plan would be funded through a progressive payroll tax paid 80 percent by employers and 20 percent by employees. Bill Author Richard Gottfried said the payroll taxes would be less than current ones, and property taxes would go down, too, because counties currently pay a large share of Medicaid costs, and the state would no longer need Medicaid.

Gottfried predicts the bill would save New Yorkers more than $45 billion annually, and he says waivers would be sought so federal funds now received for New Yorkers in Medicare, Medicaid and Child Health Plus would apply.

“It is astonishing how much money we will be able to save by taking insurance companies out of the picture, negotiating with manufacturers of drugs and devices, and improving the policing of fraud and waste,” Gottfried said.

Republicans expressed skepticism that Gottfried’s plan could operate as efficiently as he said and save money.

Edward Ra, a Long Island Republican, said he’s against the proposed plan because it could lead to more people defrauding the government.

“The bottom line is that we’re perpetuating a system full of fraud, waste and abuse, when there are very easy measures that could combat that,” Ra said.

The vote fell roughly along party lines.

 

Assembly passes universal health care bill

June 3, 2015

http://www.capitalnewyork.com/article/albany/2015/05/8568890/assembly-passes-universal-health-care-bill

By Dan Goldberg 8:41 p.m. | May. 27, 2015 15follow this reporter

The state Assembly on Wednesday voted for a single-payer health bill, the first time in more than two decades the chamber has taken up the measure.

The vote was 89-47, an overwhelming but largely symbolic step toward universal health insurance. The bill now heads to the Republican-controlled Senate where it is not expected to pass.

Assemblyman Richard Gottfried, chair of the health committee, gave an impassioned speech on the floor in support of the New York Health Act, arguing that it was long past time for New Yorkers to rid themselves of the intrusive insurance companies whose goal is to deny claims rather than provide care.

“You do not have to be an Einstein to understand New York Health is the right choice for New York,” Gottfried said.

Gottfried, a Democrat from Manhattan, spent the legislative session barnstorming the state, trying to gain support for his bill, which would be funded through a progressive income tax and payroll assessments. There would be a net savings of $45 billion in health spending by 2019, Gottfried said, based on an analysis from Dr. Gerald Friedman, a professor at the University of Massachusetts at Amherst, though that figure was attacked by Republicans.

The bill, Gottfried said, would lower costs by getting rid of insurance companies. It would lower administrative costs and allow doctors to focus their time on treating patients instead of fighting for reimbursements.

“What will bring down health care costs is taking out of the equation the more than 20 percent we now spend on administrators whose job it is to fight with insurance companies,” he said.

The plan’s benefits, Gottfried said, would be more generous than any plan on the current market, and there would be no co-pays or deductibles. The bill would also require a care coordinator for every member, though that coordinator is not empowered to choose the type of care a patient receives.

For some Republicans, it was all too good to be true.

“This bill promises remarkable things for New York State residents,” said Assemblyman Andy Goodell, a Republican from Chautauqua. “It says providers, ‘you’ll be paid a lot more money,’ and it says to the employees ‘you’ll contribute a lot less money,’ and it says to the patients ‘you’ll have much broader access,’ and to the employers ‘you’ll pay $45 billion less.’ My background is in math and economics and I haven’t been able to figure out how this all works. … There is no free lunch, there is no free health care.”

Leslie Moran, spokeswoman for the New York Health Plan Association, which represents insurers, said the bill “represents an unrealistic, utopian view of a universal health care system where everyone would be covered, everything would be covered and the system would magically pay for it all.”

One problem, pointed out by Republicans, is that the offering, while generous, is the opposite of what public health officials are pushing, including those in the Cuomo administration, who have professed that insurance systems, and high deductibles and co-pays help ensure people use the health system judiciously instead of opting for more, often unnecessary, care.

“There is a role for insurance companies,” state health commissioner Dr. Howard Zucker said Wednesday before the debate.

The last time a universal health care bill was on the Assembly floor was 1992. It passed but the debate was sidelined because of federal efforts to reform health care, which ultimately failed under the Clinton administration.

The passing of the Affordable Care Act, which subsidizes private insurance for people below a certain income level, was a valid effort, Gottfried said, but ultimately served to highlight why the system needs to be entirely scrapped.

“I think the A.C.A. has made it clear to people … there are profound problems in our health care system that cannot be addressed by incremental change in that system,” Gottfried said.

Wiping out an industry—even the insurance industry—was not seen as popular by many Republicans who worried about the loss of jobs and what might happen should this plan fail.

Goodell asked why the state should go down this road when Medicaid—a government run insurance program for lower-income residents—is expensive, burdensome and not well liked.

“Why would we want to expand that type of approach,” he asked.

Gottfried responded that his bill would improve Medicaid by putting everyone into one pot. He would, he said, eliminate the two-tiered system. There’d be no greater risk of fraud under this law than in the current Medicaid program.

Republicans also pointed out how much was left to be done. The income tax rates have yet to be decided, but would likely cost the highest earners more than they currently pay for health insurance, while subsidizing lower income residents.

The analysis provided by Gottfried estimates no income tax on the first $25,000, an income tax of 9 percent on income between $25,0001 and $50,000, graduating to 16 percent tax for income over $200,000.

The legislation is also not specific on how to deal with residents of New York State who retire to another state.

That would have to be resolved at a later date, Gottfried said.

“Though we have numerous pages on this legislation, we have numerous holes also,” said Al Graf, a Republican from Holbrook. “There is no way I can go back to my constituents and tell them you may have coverage in the future. … This is an exercise in insanity.”

Moran said there is no certainty that providers would accept government set reimbursement, though Gottfried said almost all would receive more for their services than they are currently being paid.

The bill also “completely disregards the economic contribution of health plans—both to the state and to local communities,” Moran said.

Joseph Borelli, a Republican from Staten Island, cited Vermont, which tried and failed to enact a single-payer health system.

Vermont’s collapse has been a cautionary tale for even the most enthusiastic supporters of government sponsored health insurance, but Gottfried was having none of it.

“New York … bears no resemblance to Vermont,” Gottfried said. “The bill bears very little resemblance to Vermont. Their financing system is different. The two have absolutely nothing to do with one another, nothing! Why don’t you ask me whether New York will flood Just like Texas flooded if we enact this plan. The weather in Texas has as much to do with this as Vermont does.”

Read the bill here: http://bit.ly/1JVUg1I

Assembly passes bill to create single-payer health plan

June 3, 2015

http://blog.timesunion.com/capitol/archives/236046/assembly-passes-bill-to-create-single-payer-health-plan/

Posted on May 27, 2015 at 6:16 pm by Matthew Hamilton in AssemblyAssembly Democratic ConferenceHealthHealth Care

The state Assembly approved on Wednesday evening a bill that would create a single-payer health system in New York.

The bill passed 89-47.

As my colleague Claire Hughes reported this morning, the vote is the first to occur on the proposal, which Health Committee Chair Richard Gottfried has introduced annually for years, since 1992.

“New Yorkers deserve better,” Gottfried said in a statement. “We should be able to go to the doctor when we need to, without worrying whether we can afford it. We should choose our doctors and hospitals without worrying about network restrictions. We deserve health coverage for all of us, paid for based on our ability to pay, not what the market will bear. I’m proud the Assembly has passed the New York Health Act, and I look forward to working with a great community of advocates including medical professionals, medical students, organized labor, and Senate sponsor Bill Perkins, to enact it into law.”

More from Claire Hughes:

The proposal, called the New York Health Act and dubbed “Medicare for all” by advocates, would provide comprehensive health coverage to all New Yorkers.

With 82 co-sponsors, the bill has a superb chance of getting the 76 votes it needs to pass the Democratic-controlled Assembly. (Passage is highly unlikely, however, in the Republican-majority state Senate.)

Some medical groups and labor unions have supported the proposal in recent years, in addition to grassroots proponents. They argue that a single-payer system would be less costly and easier to administer than the current private health system.

The Health Plan Association, which represents insurance companies, has opposed it; its CEO, Paul Macielak, said at an Assembly hearing in January that the act would dissolve the current private health care industry, which has a proven record for providing care.

Since a public option that would run parallel to a private insurance system failed to make it into the federal law known as Obamacare five years ago, advocates for a single-payer health system have focused their work on the states.

The failure of the federal law known as Obamacare to include even a public option that would run parallel to a private insurance system moved the focus of the single-payer movement to the states.

Vermont recently backed away from implementing a single-payer plan due to the high cost. An analysis released in March by a University of Massachusetts professor estimated New York health care expenditures would actually be reduced by $45 billion a year if the law were enacted.

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